Dalian Wanda Group Acquires AMC Entertainment For $2.6 Bln.

5/21/2012 8:38 PM ET

Chinese conglomerate Dalian Wanda Group Monday agreed to acquire the U.S.'s second largest cinema chain AMC Entertainment Holdings Inc. for about $2.6 billion. The transaction, which is the largest overseas acquisition by a private Chinese company, makes Dalian Wanda the world's largest cinema owner.

The closing of the transaction is subject to customary closing conditions and the receipt of U.S. and China regulatory approvals.

Dalian Wanda also said it plans to invest up to an additional $500 million in privately-held AMC Entertainment over time to fund the latter's strategic and operating initiatives.

Dalian Wanda has agreed to retain the management team of AMC Entertainment, and also does not expect the acquisition to affect the latter's 18,500 employees. AMC Entertainment will continue to be based in the Kansas City metropolitan area.

Upon closing of the transaction, AMC Entertainment will become a wholly owned unit of Dalian Wanda.

Wang Jianlin, chairman and President of Dalian Wanda, said, "This acquisition will help make Wanda a truly global cinema owner, with theaters and technology that enhance the movie-going experience for audiences in the world's two largest movie markets..."

Dalian Wanda, with $16.7 billion in annual revenue, focuses on commercial properties, luxury hotels, tourism investment, department stores and cultural businesses. Its portfolio includes 86 theaters and 730 screens as well as large-scale stage show, film production and distribution, among others.

AMC Entertainment operates 346 multiplex theaters, and a total of 5,034 screens, mostly in major metropolitan markets in North America. The company's owners include include Apollo Global Management, Bain Capital, the Carlyle Group, among others.

Dalian Wanda said it has provided to AMC Entertainment financing commitments to fully finance the transaction.

In connection with this transaction, Ernst & Young LLP has served as advisor and Davis, Polk & Wardwell LLP has served as legal counsel to Dalian Wanda. Citigroup Global Markets Inc. has served as financial advisor and Weil, Gotshal & Manges LLP has served as legal counsel to AMC Entertainment.